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Warstein is located north of the Arnsberger Wald (forest) at a brook called Wäster. The area south of the city is mostly forested; the lightly forested Haarstrang mountain is to the north. The river Möhne flows between these two areas. The highest elevation is 581 m (1,906 ft) in the south of the city near a hill called Stimm Stamm; the lowest elevation is 216 m (709 ft) in the village Waldhausen in the north.

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Evidence of human life was found in the Bilsteinhöhle cave between Warstein and Hirschberg. Warstein was first mentioned officially in 1072. Historians once thought Warstein was organized as an official town in 1276, but that is wrong. Probably it became a town in the same year as Belecke in 1296. In the Middle Ages Warstein was part of the Hanseatic League, that is a trade association for guilds, a very important international business association at that time. A fire in 1802 destroyed big parts of the town. After that the town centre was moved to the Wester brook. In 1844 the Amt Warstein was founded. It was part of the Archbishopric Cologne till 1902. In 1975 Warstein and the other eight independent villages became the new town of Warstein.